Backing Off on State Authorization

07/31/2012

In a reversal of one of the most sweeping and controversial portions of its program integrity rules, the Education Department said Friday that it will no longer enforce a requirement that distance education programs obtain permission to operate in every state in which they enroll at least one student.

The change was announced quietly — on the third page of a five-page attachment to a "Dear Colleague" letter that the Education Department sent to institutions Friday — but will likely be cheered by many in higher education. Colleges have fought the state authorization rule both in Congress and in the courts since it was first put forward in October 2010, arguing that archaic authorization rules create too much red tape and financial burden for online programs.

The decision not to enforce the policy comes in the wake of a court setback in June, when an appeals court upheld a lower court's decision to overturn the rule.

The court threw out the rule on procedural grounds, saying the department had the authority to create such a rule but overstepped the bounds of the negotiated rule-making process. It was considered a minor victory for the for-profit colleges that brought the lawsuit — with effects for nonprofit and public institutions with an online presence.

In the letter, the Education Department said colleges still will need permission to operate in their home states. And, it noted, colleges still have to comply with state laws on authorization. In the wake of the program integrity rules, some states have changed their authorization requirements, in some cases making it more difficult or expensive for colleges to get permission to operate, said Russell Poulin, deputy director of research and analysis with the WICHE Cooperative for Educational Technologies.

As efforts to overturn the rule made their way through the courts and Congress last year, Poulin had warned that the genie was out of the bottle: states would likely seek to enforce authorization laws already on the books even if the federal requirement was thrown out.

That's still true, Poulin said Monday night. But he added that many states don't have the manpower to enforce the authorization rule, and without the threat of federal enforcement nudging colleges to comply, many might wait to get caught rather than seeking authorization in advance.

The department could also try again to craft a state authorization requirement during another round of negotiated rule-making. Whether it will do so is still unclear. Department representatives did not immediately respond to a request for comment Monday night.

Efforts were already underway to make the patchwork of state laws less complicated, notably through reciprocity agreements, under which states would agree to accept each other's authorizations. Those projects are likely to continue, Poulin said.